Social Insurance with Competitive Insurance Markets and Risk Misperception* This paper considers an economy where individuals differ in productivity and in risk. Rochet (1991) has shown that when private insurance markets offer full coverage at fair rates, social insurance is desirable if and only if risk and productivity are negatively correlated. This condition is usually shown to be satisfie...

This paper examines the implications of minimum standards for insurance markets. I study the imposition of binding minimum standards on the market for voluntary private health insurance for the elderly. The central estimates suggest that the introduction of the standards was associated with an 8 percentage point (25%) decrease in the proportion of the population with coverage in the affected ma...

We investigate a government financed voucher program that allows all Americans to buy health insurance in the private insurance market. We investigate whether health insurance vouchers are able to increase the number of people with health insurance and decrease aggregate health care spending that threatens the solvency of Medicare and Medicaid. We develop a multi-generation dynamic general equi...

In health care systems today, including those of Switzerland and the United States, participants do not necessarily see the big picture of lifetime health costs and quality of life, and in many systems consumers and providers lack the incentives to manage preventative and chronic care to minimize lifetime private and social health costs. Resource allocation problems induced by asymmetric inform...

The paper presents the results from a CGE model of interactions between public and private health care, outputs of non-health goods and national welfare in a small open economy applied to the UK. The effects on welfare of higher provision come through direct gains, affecting the well-being of households, and indirectly, through increases in the effective (i.e. ‘able to work’) endowments of skil...

I show that US prescription drug prices can be better understood by accounting for history-dependent demand and industry pricing structure, which has important implications for potential government negotiation. First, I confirm the presence of inertia and history-dependent demand for generic drugs through a novel quasiexperiment. Next, I capture pricing structure in a dynamic pricing game invol...

Awareness and AIDS: A Political Economy Perspective* Across African countries, prevention policies are unrelated to the prevalence of HIV/AIDS and, even in countries in which they were successful, these policies are often unstable or reversed. To explain these two puzzles, we propose a simple political economy model that examines how prevention policies and the epidemic dynamics are jointly det...

This study seeks to provide evidence for deciding whether or not a new pharmaceutical should be included in the benefit list of social health insurance. A discrete-choice experiment (DCE) was conducted in Germany to measure preferences for modern insulin therapy using long-acting insulin analogue ”insulin detemir” in comparison to NPH insulin. The DCE contains two price attributes, copayment an...

We compare healthcare spending in public and private Medicare using newly available claims data from Medicare Advantage (MA) insurers. MA insurer revenues are 30 percent higher than their healthcare spending. Healthcare spending is 25 percent lower for MA enrollees than for enrollees in traditional Medicare (TM) in the same county with the same risk score. Spending differences between MA and TM...